SBA Loan Programs part 13

Eligibility

A business is usually eligible for the SBALowDoc if

·         The purpose of the loan is to start or grow a business;

·         The existing business employs no more than 100 people, has average annual sales for the preceding three years not exceeding $5 million, and the business including affiliates; the business and its owners have good credit; and the business owners are of good character.

Issue: SBALowDoc

1.     Loan Limit: $150,000

2.     Maximum SBA

3.     Guaranty %: 85%

4.     Guaranty Fee: 1% on Guaranteed Portion

5.     Eligibility Decision: Relies Heavily on Lender Checklist

6.     But SBA Still Reviews

7.     Revolving Lines

8.     of Credit: Not permitted

9.     Turnaround Time: 100% Within 36 Hours

10.   Forms: Revised 1 Page Application Form That Requires More Data, But Same for ALL SBALowDoc Loans Regardless of Amount

11.   Collateral: Follows 7(a) Policy Lack of available collateral will not be the sole basis for decline of any loan

12.   Credit Decision: By SBA With Credit Scoring

13.   Reconsideration: Permitted in Field Offices Under SBALowDoc or Regular 7(a)

14.   Policies and Procedures.

15.   Secondary Market: Can Be Sold

16.   Lender Oversight: Field Offices Responsible for Lender Review as Coordinated with OFA and OFO in HQ

17.   Liquidation: Lender Liquidates Non-Realty BEFORE Buyback

18.   LowDoc Processing Centers

For questions concerning SBA LowDoc Processing, please contact a LowDoc processing center:

LowDoc Processing Center in Hazard, KY –

Phone (606) 436-0801;

Fax: 606-435-2400 (for Lender Use Only)

LowDoc Processing Center in Sacramento, CA –

Phone: 916-930-2444;

Fax: 916-930-2180 (for Lender Use Only)

The Financial Six C's

1.     CHARACTER The degree to which a borrower feels a moral obligation to pay his/her debts, measured by the credit and payment history.

2.     CAPACITY TO PAY A subjective determination made by a lender based upon an analysis of the borrower's financial statements and other information.

3.     CAPITAL The amount of capital in a business is equal to the total of capital from debt and equity. Lenders prefer low debt-to-asset and debt-to-worth ratios and high current ratios. These indicate financial stability.

4.     COLLATERAL An asset owned by the borrower, but promised to a lender against nonpayment of the loan. The amount of collateral varies from lender to lender. The closer the collateral value is to the loan amount, the more comfortable the lender will be that the loan will be repaid.

5.     CONDITIONS General economic, geographic and industry,

6.     CONFIDENCE A successful borrower instills confidence in the lender by addressing all the lender's concerns on the other Five C's. Their loan application sends the message that the company is professional, with an honest reputation, a good credit history, reasonable financial statements, good capitalization and adequate collateral.

DYNAMAX BUSINESS CREDIT